This is driven by the economics of venture capital; a modest success, in terms of starting a software business, is an abject failure in VC terms. Thus Twitter never even condescended to compete with the profitable, and customer-charging, but otherwise highly similar business Yammer, opting instead to aim higher, in financial terms, and aspire to becoming Crappy Television 2.0. An enterprise service business which sold for $1.2 billion is just not worth it from a VC point of view.

And why does social media revolve around startups defined under VC terms?

This is also why it's incredibly easy to find work if you build tech startups, but very difficult otherwise: Republican economic policies have inflated the profits of risk-seeking, speculative investment so much that it's now a very over-represented form of investment.